The art of law in Jerusalem: How outsourcing to Israel is building a successful firm

by
Sophie Schroder |
11 Jul 2014

Since its inception three years ago, KWS Legal has modelled itself on a start-up business and garnered great success: More recently the firm was a finalist in the 2014 Telstra Business Awards.

And just like you would find with a start-up IT business, a large part of the firm’s formation and culture has come from a conscious decision to outsource and set up shop in a country where innovation runs rampant but salaries are far lower than their hometown equivalent.

KWS founders, senior partner MichaelKadoury and managing partner Harriet Warlow-Shill, told Australasian Lawyer that having an office in Jerusalem, Israel, ticks all the boxes and makes sense for the firm both commercially and culturally.

Speaking from the office in Jerusalem, albeit amid a day of bomb alerts, Kadoury says that not only is Israel is a country with more than a staggering 60,000 qualified lawyers, but there is also a significant amount of legally trained immigrants that enter the country for lifestyle reasons.

KWS taps into that market and incorporates it across all levels of the practice, which includes using Israeli lawyers on Australian cases as paralegals, for example.

“Salaries here are much cheaper – less than a third of the cost for the same quality lawyer…a junior partner level lawyer can cost as little as A$5,000-A$7,000 a month,” he says. “Especially when you’re doing international deals and transactions, it really doesn’t matter where [the lawyers] are.”

But it’s not just Israeli lawyers that you will find in the firm’s office in Jerusalem.

Warlow-Shill, who works from the Australian office, says that Israel is one of the few locations where you will find extremely high achieving Australian lawyers, but with the price differentiation that makes sense commercially.

“People are moving there because they want to for a variety of reasons apart from professional progression, and we can access them but take advantage of the price differential,” she says. “Also, as we become more focused on our online strategy we need around the clock lawyers, and we can provide an after-hours legal service seamlessly. Both time zones have it covered.”

These office locations are a strategic move that allows KWS to service its clients at home in Australia and in Israel, as well as across New York and Europe efficiently.

But aside from the geographical advantages, Kadoury says that the commercial opportunities that exist between Australia and Israel are only set to grow exponentially.

Business is booming, and KWS has already helped almost a dozen Israeli companies enter the Australian market, and vice versa.

He says it helps that Israelis are great at developing where Australians are good at commercialising and bringing products to the next level.

And as an extra bonus, Kadoury has been able to use his status as the only qualified migration agent in Israel to his advantage in assisting businesses move into each of the countries.

“We understand both cultures very deeply – it’s one thing to understand the law, but another to understand both cultures, and it allows us to guide clients on either side of the border,” he says.

Warlow-Shill agrees, and says there is great synergy between Australia and Israel in that both have had to make their way through hostile land, which has been a significant driver of innovation.

The amount of innovation going on in Israel right now is “stunning” she says, and offers constant potential business.

The KWS founders say that from an Australasian perspective they are not alone in outsourcing legal work and it’s a trend they predict we will see far more of in future.

But the key to their success has to come from tying the businesses at home and abroad together in a way that makes the client experience seamless.

Handover between the offices is a vital part of this process, they say.

Outsourcing can be a highly valuable resource if it’s done in the right way, but one of the biggest barriers can be making sure the quality of work is up to standards, says Kadoury.

“One of the differences with us is that we’ve got qualified Australian lawyers overseeing the team…I’ve seen the same thing work in the IT industry,” he says. “But when you use some random team in India you’re not going to get what you want.”

The currently strong currency in Australia puts law firms in a prime position to take advantage now and use similar resources, he says.

But he adds that it’s important to build a strong process when it comes to outsourcing, including:

Strong supervision and clarity in what is expected in terms of work

The ability to retrain people who are not used to Australian practice

Careful vetting and attention to qualifications of candidates

A clear communication of the business philosophy

“Our method allows a firm of our size to be able to give the same level of advice as a large firm with lawyers in every country.”